Statement The Central Government has directed the State Government to reduce the Government expenditure in view of the serious resource crunch and it may not be able to sanction every additional grant to the states for the next six months. Assumptions I. The State Government is totally dependent on the Central Government for its expenditure. II. The Central Government has reviewed the expenditure account of the State Government. III. The State Government will abide by the directives.
Correct Answer: II and III are implicit
Explanation:
The use of the word 'totally' makes the assumption doubtful. It is the given that the Central Government has directed the State Government to reduce its expenditure account and also the State Government will abide by the directives.
